Wednesday, 8 October 2008


The Sweeper alerted us to this in the Guardian

Its the Q and A advice for UK punters with money in the Icelandic bank.

Note that this is affecting 300,000 savers in Britain....

What has gone wrong?

The UK's Financial Services Authority (FSA) says it expects the Icelandic authorities to put Landsbanki into insolvency proceedings after it went into receivership this morning. More than 300,000 savers with its UK banking arms Icesave and Heritable Bank could be left seeking compensation. Currently Icesave has a message on its website telling consumers that it is not processing any deposits or any withdrawal requests on its internet accounts. The company is not giving out any information beyond this.Heritable Bank is also not allowing any new deposits or withdrawals.

What happens to my money if insolvency proceedings are started?
If insolvency proceeding are started this would trigger payouts from depositor protection schemes. Up to £50,000 of each saver's money would be protected through a combination of the Icelandic deposit compensation scheme and the UK's Financial Services Compensation Scheme (FSCS).The Icelandic scheme would pay out the first €20,887 (£16,170) that people lost. If for some reason it was unable to do this, it has a reciprocal agreement with other Nordic countries who would step in.The UK scheme would then top-up savers' compensation to the £50,000 limit for sole accounts and £100,000 for joint ones.The European Union today agreed to increase the compensation limit for EU countries to 50,000 euro (£38,900), but it is not yet clear if the higher limit would also include Iceland.

How long would it take to get my money back?

It is difficult to say, but it is thought the Icelandic scheme would be able to pay out relatively quickly as it is partially pre-funded.In the UK, the FSCS has said it would pay compensation as quickly as possible, but it could take months rather than weeks. A consultation is currently under way looking at getting the scheme to return the bulk of consumers' money to them within a week.

What happens if I have more than £50,000 invested?

Unfortunately, sums above this amount are not covered by the compensation schemes and you would have to join the queue with other creditors.

More here

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